Three Key Takeaways from the President’s FY17 Budget Request

Although it probably feels like FY16 just arrived (in part because, well, it did just arrive), industry received a timely reminder this week via the President’s FY17 budget request that now is the time to start thinking long-term.

While it’s tempting to overlook this request — since it’s the last one made under the current administration — those of us in the IT community should pay close attention to the IT-specific sections of this request. There’s a lot in the request that has bipartisan appeal, and one proposal in particular could up end most of what we currently know about selling IT to the government.

Here are three key points from the President’s FY17 budget request you should know:

1. A $3.1 billion multi-year fund for IT modernization is in the works
   This is the greatest departure from current practice, and if implemented, could dramatically affect the way government buys IT. This fund would be carried forward by reinvesting long-term savings on maintenance spend — so it would both free up and incentivize federal customers to invest in innovative technology and finally, combat the rise of steady state expenditure (which makes up more than 70% of the FY17 IT request).

2. Cybersecurity spending is up 35%
   Last year, the administration brought a lot of public focus to the government’s generally weak cybersecurity posture. This year, the government is making cybersecurity a top priority by asking for an additional 5 billion dollars in information security spend – a 35% increase from last year. The budget also creates the new position for a Federal CISO.
   

3. Most agencies will see slight increases in IT spend
   While there are some notable exceptions — USDA’s request is down by 7%, SBA by almost 9%, and HUD almost 16% — most of the government is looking at modest increases to their total top line. We will delve deeper into these numbers in the coming weeks, but for now, suffice to say that FY17 looks to be a good one for the federal IT market.

Want to know more about positioning yourself now for sustained success in FY17? Reach out to immixGroup’s industry-leading Market Intelligence team to learn about the trends, programs, and funding flows that create requirements for your technology.